Canada's Digital Divide Widens
Updated: Mar 29, 2021
Poly Brief by Georgia Evans
This piece is part of Kroeger Policy Review's first issue on Race, Religion, and Culture. The full issue is available here.
Eight months into the pandemic, we can look back to mid-March with a strange fondness. Safe in our homes, we hunkered down to stream Tiger King, connect with our colleagues and classmates through Zoom, and Facetime the friends and family we couldn’t see in person.
Imagine if the pandemic had happened and we didn’t have the Internet, so many of us across Canada and the world thought in collective relief. The Internet was a lifeline to the reality we once knew; the very thing that kept the economy afloat; it’s how we accessed life-saving information, unemployment benefits, and other vital services.
Except not every Canadian had access to the Internet.
In 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) declared that the Internet is a basic service, similar to water and electricity, and established the objective of achieving “affordable, high-quality telecommunications services” for all Canadians (1). This universal service objective includes minimum Internet speeds of 50 megabits per second (mbps) download and 10 mbps upload, as well as unlimited data.
Despite this objective, one in 10 Canadian families do not have a home Internet connection (2). Only 40.8% of rural Canadians and 31% of First Nations have access to 50/10 Internet speeds (3). In April, when the country faced the strictest lockdown measures, the Canadian Internet Registration Authority (CIRA) found that median rural download speeds were nearly twelve times slower than that of their urban counterparts (4). Rural, remote, and Indigenous households that are fortunate enough to have Internet connections often pay far more than those in urban cities, despite receiving an inferior connection. Low-income households across the country have had to sacrifice other expenses in order to afford their communications bills (5). The state of connectivity in Canada puts rural, remote, Indigenous, and low-income Canadians at a disadvantage in a crisis when support is needed the most.
The digital divide is a classic example of a market failure. A key principle of economics is that when the market fails to efficiently allocate resources, due to the presence of externalities or a concentration of market power, the government’s use of public policy can improve market outcomes (6). The market cannot efficiently allocate resources in a way that provides adequate coverage to rural, remote, and Indigenous communities. The “Big Three”– Bell, Rogers and Telus– have a significant concentration of the market and have used this power to shape the connectivity landscape in Canada.
They have the ability to charge high prices with limited competition, and their control over most of the infrastructure impedes smaller companies’ abilities to compete and therefore lower costs (7). Further, the high cost of providing coverage in rural and remote areas has given the Big Three no incentive to improve connectivity in those areas in an appropriate manner (8). Smaller internet service providers (ISPs) and not-for-profits try to fill these gaps, however, they often find themselves competing against these larger companies for infrastructure grants (9). While the government has allocated billions of dollars for Internet infrastructure funds, there has yet to be any demonstrable improvements in Canadian connectivity.
On November 9th, the Government of Canada opened applications for the highly anticipated Universal Broadband Fund (UBF). On June 8th, Rural Economic Development Minister Maryam Monsef announced the fund would open “in the coming days,” which amounted to significant frustration when the fund did not open for months on end. The November announcement included a $150-million fund for projects that could be completed by November 2021 (10). Despite the excitement of this announcement, there have been concerns that communities who need connectivity the most may not be prioritized. The government’s slow action has left too many Canadians disconnected and disadvantaged, and significant work must be done to ensure that the UBF is truly universal.
Luckily, there are many groups across the country who have been fighting for the government to improve its regulation and close the digital divide for good. Through advocacy, community initiatives and grant programs, organizations like OpenMedia, CIRA, ACORN, First Mile, the Public Interest Advocacy Centre, as well as hundreds of local governments and community organizations, provide hope that Canadians will get the resources they need to have reliable, affordable, meaningful Internet connections.
The digital divide has left far too many Canadians behind during COVID-19. If there is not a restructuring of the telecommunications sector and an acceleration of broadband deployment in under and unserved areas, the whole country may find that its insufficient and unaffordable connectivity will stand in the way of a proper post-COVID recovery.
Canadian Radio-television and Telecommunications Commission, “CRTC 2016-496” (Telecom Regulatory Policy,Gatineau,2016).
Canadian Radio-television and Telecommunications Commission, “Communications Monitoring Report,” Canadian Radio-television and Telecommunications Commission, 2018, Date Accessed November 4, 2020, https://crtc.gc.ca/pubs/cmr2018-en.pdf
Josh Tabish, “New internet performance data shows the staggering scale of Canada’s urban-rural digital divide,” Canadian Internet Registration Authority, May 8, 2020, https://www.cira.ca/newsroom/new-internet-performance-data-shows-staggering-scale-canadas-urban-rural-digital-divide
Adam Jacobson, “’Internet is the only lifeline they have’: Canada needs to confront ‘digital divide’ amid COVID-19 crisis,” CBC Radio, March 27, 2020. https://www.cbc.ca/radio/spark/working-from-home-data-surge-a-balancing-act-for-isps-tech-expert-1.5511650/internet-is-the-only-lifeline-they-have-canada-needs-to-confront-digital-divide-amid-covid-19-crisis-1.5513206
N. Gregory Mankiw, Ronald D. Kneebone, and Kenneth J.McKenzie, Principles of Microeconomics, 7th Canadian Edition, (Toronto: Nelson Education Ltd.), 10-12.
Public Interest Advocacy Centre, “TNC 2019-406, Intervention of the PIAC On Potential Barriers to the Deployment of Broadband-Capable Networks in Underserved Areas in Canada,” May 7, 2020.
Canadian Internet Registration Authority, “Unconnected: Funding Shortfalls, Policy Imbalances and How They Are Contributing to Canada’s Digital Underdevelopment,” Canadian Internet Registration Authority, Date Accessed November 1, 2020, https://www.cira.ca/resources/state-internet/report/unconnected
OpenMedia, “Government’s Universal Broadband Fund finally announced,” OpenMedia, November 9 2020, https://openmedia.org/press/item/governments-universal-broadband-fund-finally-announced